Skip to main content
    S
    SimpleLoanCanada
    CalculatorsLendersGuides
    Debt Repayment GuidesBudget BuilderCredit Builder Hub
    100% free
    S
    SimpleLoan

    Helping Canadians make informed financial decisions with transparent loan comparisons, calculators, and plain-English guides.

    Privacy Policy
    Transparent
    Free Tools

    Calculators

    • Loan Calculator
    • Mortgage Calculator
    • CMHC Optimizer
    • Land Transfer Tax
    • Affordability
    • All Calculators

    Resources

    • Lender Directory
    • Financial Guides
    • Blog
    • Credit Builder Hub
    • Resources & Disclosures

    Tools

    • Financial Health Quiz
    • Lender Rankings
    • Prime Rate History
    • 2026 Borrowing Numbers
    • Affordability by Salary
    • Loan Payments by Amount
    • Printable Checklists
    • Free Calculator Widget
    • Resources

    Company

    • About Us
    • Contact Us
    • Editorial Team
    • Editorial Policy
    • How We Make Money
    • Rate Reference
    • Q&A
    • Privacy Policy
    • Terms of Service

    © 2026 SimpleLoan Canada. All rights reserved. Not a lender.

    All rates shown are for informational purposes only. Always verify with your lender.

    Designed by Trustoby Designs
    HomeAnswersWhat is the difference between APR and interest rate?
    Borrowing Basics

    What is the difference between APR and interest rate?

    Quick answer

    What is the difference between APR and interest rate?

    The interest rate is charged on your balance; APR adds mandatory fees, so it is the number to compare offers with. Canadian lenders must disclose APR under the Cost of Borrowing regulations.

    Two loans can share an interest rate and cost very different amounts.

    • Interest rate — applied to your outstanding principal only.
    • APR — interest plus origination, administration and required insurance fees, expressed as one annual percentage.

    Example: a $20,000 loan at 7% with a $600 admin fee carries an APR closer to 8.2%. A competing 8% loan with no fees is the cheaper deal. Always compare APR over the same term, and also check the total cost of borrowing figure lenders are required to show — it converts the percentage into real dollars.

    Related Questions

    What is the difference between APR and interest rate?

    The interest rate is charged on your balance; APR adds mandatory fees, so it is the number to compare offers with. Canadian lenders must disclose APR under the Cost of Borrowing regulations.

    Keep reading

    • How fast can I get a personal loan in Canada?
    • What credit score do I need for a personal loan in Canada?
    • How much mortgage can I afford in Canada?
    • Is a fixed or variable mortgage better in Canada right now?

    More answers like this

    Get weekly Canadian finance Q&As in your inbox.

    Related Content

    Blog

    Index Funds in Canada: A Plain-English Beginner's Guide

    How index funds and index ETFs work in Canada, what the fees really cost you, which accounts to hold them in (TFSA, RRSP, FHSA) and how to start with a small amount.

    Read full article : Index Funds in Canada: A Plain-English Beginner's Guide    Blog

    HELOC Payments Explained: Interest-Only vs Paying It Off

    How Canadian HELOC payments are calculated, why the interest-only minimum never shrinks your balance, and how much it takes to pay a line of credit off on schedule.

    Read full article : HELOC Payments Explained: Interest-Only vs Paying It Off    Tool

    Calculate your loan payment

    See monthly payments, total interest, and amortization in CAD.

    Read full article : Calculate your loan payment    Lender

    Compare RBC Royal Bank loans

    Rates, requirements, pros & cons.

    Read full article : Compare RBC Royal Bank loans